Internet radio dying?

[SUBMAN1]

Seems it may have some hiccups in the future, that is for sure:

http://www.smh.com.au/news/Technology/Copyright-Royalty-Board-rejects-appeals-from-Internet-radio-broadcasters/2007/04/16/1176575715771.html

Internet radio broadcasters were dealt a setback Monday when a panel of copyright judges threw out requests to reconsider a ruling that hiked the royalties they must pay to record companies and artists.

[Heibges]

I received a notice from Pandora Internet Radio this morning.

They have to pay 4 times what Satellite Radio plays for licensing fees.

Broadcast Radio pays nothing.

[TteFAboB]

The internet is dangerous competition.

[jumpy]

^^
you mean I get to choose what I listen to instead of having to hear the crap radio1 plays all day long?

:roll:

[SUBMAN1]

^^
you mean I get to choose what I listen to instead of having to hear the crap radio1 plays all day long?

:roll:

That about sums it up. Nothing to listen to but news on normal radio anymore. My AM seems to be getting more time than FM in my car. However, link my to the inet and I'm probably somewhere like www.di.fm or something for music. I put my home stereo on my wireless network so that I can stream music to it! :p

Maybe that will be dying now. :cry:

-S

[SUBMAN1]

Here is di.fm's take on it:

Digitally Imported Blog


Monday, March 12, 2007

New Music Royalty Rates May Shut Down Internet Radio

On Friday March 2nd, the U.S. government, through the Copyright Royalty Board (CRB), made a determination of the royalty rates Internet Radio webcasters must pay the owners of sound recording copyrights to license the music they webcast for the years 2006-2010. The license is paid to SoundExchange, a nonprofit organization that collects royalty payments from digital music broadcasters and distributes them to rights holders.

The issue is that the new rates completely ignore the business and market realities of Internet Radio. In a nutshell they expect many webcasters, such as at Digitally Imported, to pay far greater money for licensing than we ever even collect from all of our services, effectively driving webcasters out of business.

For commercial and for larger non-commercial webcasters the judges set a pay-per-play rate of:


$.0008 per play for 2006
$.0011 per play for 2007
$.0014 per play for 2008
$.0018 per play for 2009
$.0019 per play for 2010No need to adjust your glasses, you are seeing it correctly. Not only are the rates outrageous but they also continue to increase wildly every year. For example, by 2007 the rate jumps 37% from 2006!
SaveTheStreams.org has sample calculations here (http://www.savethestreams.org/serendipity/pages/faq.html) on what it means to stream to 10,000 concurrent listeners on average, if you are interested in the fine details. And keep in mind that Digitally Imported has far more listeners than in that example. We are talking about rates which are hundreds of % more than the revenues webcasters generate, even before any expenses for things such as wages, resources, hardware, and so on. How judges can come up with such numbers is beyond me. What we do know is that Digitally Imported was part of a collective of small commercial broadcasters which presented its arguments in court proceedings. Yet the judges completely threw virtually all of our arguments aside in making their decision.

What's ironic is that even if the Internet radio advertising market was fully mature, which it isn't, and we played as many audio ads for you as we could - then not only we'd be in for a prize for most ads played by any entity, as one other webcaster joked. But we still would be very far from reaching the required revenue numbers and being able to pay such rates. It's just completely unrealistic to expect any sort of a model to exist both now and in next years that would come close to being able to justify these rates. Maybe the big corporations of the world such as Yahoo and AOL could in theory afford to loose on such rates and still provide music, but that doesn't mean all other businesses have to go as a result. Do you really want to have just a few big corporations playing the music for you in the future?


You may ask us about why don't we just play unlicensed tracks or make an agreement with artists directly to avoid paying so much. The reality of the business is that it is virtually impossible to micromanage things this way. You'd have to have a world class communication company to be able to track down so many artists or labels, find where who is, who to contact, what forms to sign, talk them into it, etc. Plus you'd be surprised just how much of the non-mainstream music you love so much here is really signed to a label. That's why in theory the law that allows for a blanket license is really convenient - it's just that the rates which were set now are truly hopeless and stifle any kind of competition. What are we supposed to do, wave a flag and and turn into a payola service? Put a banner out that says "hey, whoever pays us the most in advance gets to have his or her track heard on the radio!"? Because that's the only model that is going to work with these rates.


This All Sounds Familiar, What Happened Last Time?

If this all sounds familiar it is because it is very similar to what happened the last time around 2002 and the Day of Silence campaign. Then too very bad rates were proposed for the period up until the end of 2005. Much hype was raised because then as now the industry was about to die. You wonderful listeners wrote in droves to your congressmen whether by submitting online forms, emails, letters, or phone calls, and they in turn heard your message. With the urging of Congressmen last time, SoundExchange and the small commercial webcasters such as Digitally Imported settled on a deal (SWSA) that allowed us to pay a percentage of revenue or expenses instead of per performance, with the rates ranging around 10-12%. Even though officially the rates set by the Copyright Royalty Board (CRB) last time were also bad, this negotiated deal allowed us to use another model and continue to exist. There was no such option allowed by the CRB this time, and the jury's still out on whether anything will be negotiated like it was last time.


WHAT YOU CAN DO TO HELP, AND IT TAKES 2 MINUTES

After careful consideration we feel that the most efficient course of action would be to send a note to your own Congresspeople complaining about the issue, stating that it is important to you and that you want them to help solve it.

To do so we are providing an easy link for you, there's even prepared text for you to Copy and Paste. Please go to this link (http://capwiz.com/congressorg/sbx/f/?aid=9612781&r=1) at Congress.org, check the text there and copy it, and by just inputting your zip code you can digitally send in the letter to your congresspeople. This really helps!

Of course the more you spread this message among friends and the media, the more attention it grabs and the more pressure there is on everyone to overturn or settle the matter before it is too late.

Also see the new post about Other Ways To Help and Donate (http://www.di.fm/blog/read/2007/03/outside-of-usa-and-want-to-help.html), which has been added since after numerous requests.

On behalf of Team Digitally Imported, and all our other fellow webcasters, we thank you for your support once again. It was a miracle that last time around we were able to do something through these actions, there's no reason why it cannot work again. Thank you for your few minutes of time to help in this matter.

Sincerely,

Ari Shohat
Founder & Manager
Digitally Imported, Inc.

[SUBMAN1]

Ouch! SOme cost calculations:

2. Are the rates really that high?
First of all, the rates webcasters pay are "per performance," meaning any time ONE listener hears ONE song (or any portion of a song), that's a "performance." If ONE listener hears ten songs, that's TEN performances. If 1000 listeners hear ten songs, that's 10,000 performances. Still with me?

The rates announced for 2006 (long story, but the licensing term is for 2006-2010, and it took this long to figure out the royalty rate, thus webcasters will pay "retroactively" for 2006) are $0.0008 per performance. Now, that's only 8/100ths of a cent, but let's do the math to see what happens.

Let's imagine a webcaster with an AVERAGE audience of 10,000 listeners (obviously, listeners come and go, and no one listens 24 hours a day, but we're talking about an average number... so sometimes there'll be lots more than 10,000 folks listening, sometimes lots less... but for math's sake, let's deal with the AVERAGE audience). Our webcaster plays 16 songs every hour, 24 hours a day, 365 days a year, to an audience that averages out to be 10,000 people.

$0.0008 X 10,000 listeners X 16 songs/hr. = $128. It'll cost our imaginary webcaster $128 to play one hour of music for 10,000 people.
At the end of the day, that's $3,072 ($128 X 24 hrs./day) -- for just a single day! After a week goes by, it's $21,504 ($3,072 X 7 days/wk.). And for all of 2006, this webcaster with a steady average audience of 10,000 listeners would owe $1,121,280!! (the $3,072 X 365 days/yr.)

That takes care of 2006. For 2007, the rate increases 37.5%! So, with no audience growth, the cost of streaming music for the year would increase to $1,541,760. And the royalty rate goes up another 28% in 2008, and another 28% in 2009, topping out at a $.0019 per performance rate in 2010 (resulting in a royalty obligation of $2,663,040 for that same audience averaging 10,000 listeners) for that year. I wish my boss gave me raises at those rates!

[SUBMAN1]

Maybe we can do something:

http://www.ipetitions.com/petition/saveinternetradio/

-S

[SUBMAN1]

After signing the petition above, tell your congress person:

http://www.congress.org/congressorg/issues/alert/?alertid=9612781&content_dir=ua_congressorg&mailid=custom

[Kapitan_Phillips]

God bless Live365.

[Rilder]

Thank the sweet gods for Eve-Radio when I played Eve-online, that really took the time away when doing boring trade runs and such, really bought the part of the cummunity that listened to it together.

[SUBMAN1]

bump

[P_Funk]

So much for the Free Market.:roll:

[Rilder]

What I got after doing the letter-to-congressman thing,Almost seems like a copy and paste job, but whatever, at least the challengers to the rate hikes are getting a chance.


Dear Mr. Miller:

Thank you for contacting me with your concerns about the
Copyright Royalty Board's recent decision to increase royalty fees.
I apologize for the delay in my response. I always enjoy hearing
from constituents back home in Wisconsin, and I would like to
take this opportunity to address your concerns.

As you may know, the Copyright Royalty Board (CRB) is a
division within the Library of Congress that is responsible for the
administration of statutory copyright licenses. On March 2, 2007,
the CRB issued a decision to change the manner in which royalty
fees for online radio stations are calculated. Fees will be collected
on a per-song, per-listener basis; this is a departure from the
current method in which fees are determined as a percentage of
revenue. The new rules are set to take effect within the next two
months, and the changes will impose fees retroactively.

Internet radio stations and their listeners are concerned that
the fee increase will put many small stations out of business and
jeopardize future of the medium. On March 20, the CRB
announced that it will consider a series of requests for a rehearing.
The original challengers of the decision have been invited to
submit documents detailing their arguments by April 2, 2007.

Again, thank you for contacting me. I appreciate having
the benefit of your views.




Sincerely,


Herb Kohl
U.S. Senator

[Camaero]

The whole thing seems nuts to me.

At least you got any response at all Rilder!

[Rilder]

Ooh actually I got 2, after digging through my email archives...


Dear Mr. Miller,

Thank you for taking the time to contact me regarding royalty
increases for Internet radio stations. I appreciate hearing from you.

On March 6, 2007, the Copyright Royalty Board publicly decided
to replace the revenue-based method of royalty payment with a per
performance, per listener scale for commercial stations. The fee to
stream one song to one listener is $.0008 in 2006 and gradually
increases to $.0019 in 2010. Stations operated by tax-exempt, non-
profit organizations would be charged a minimum of $500 per year
for a certain number of listening hours.

You may be interested to know that on March 7, 2007, the House
Energy and Commerce Subcommittee on Technology and the
Internet held a hearing entitled "The Digital Future of the United
States: Part II - The Future of Radio." You may view a webcast of
the hearing on the committee's website at
<http://energycommerce.house.gov/cmte_mtgs/110 (http://energycommerce.house.gov/cmte_mtgs/110)-ti_hrg.030707.future_radio.shtml>.
I hope you find the hearing
interesting, and should legislation on Internet radio royalties be
brought before the Senate for a vote, I will be sure to keep your
thoughts in mind.

Thanks again for contacting me. I hope you hear from you in the
future on this or any other issue of concern to you.


Sincerely,

Russell D. Feingold
United States Senator

If you wish to contact me again, please visit
http://feingold.senate.gov/contact.html (http://feingold.senate.gov/contact.html).